Ford Motor Co. reported Friday an unexpected drop in fourth-quarter earnings as a result of rising costs in North America, a loss in Europe and special charges related to debt-reduction measures.

The auto maker posted net income of $190 million, or five cents a share, down from $886 million, or 25 cents a share, a year earlier. It was also a big decline from the $1.7 billion Ford made in the 2010 third quarter.

Operating profit came in at $1.3 billion, or 30 cents a share. Analysts surveyed by Thomson Reuters were expecting operating profits of 48 cents a share.

Ford’s fourth-quarter revenue was $32.5 billion, down from $34.8 billion a year earlier, not including the Volvo unit, which was sold in 2010.

The year as a whole was one of Ford’s best ever. Net income for 2010 totaled $6.6 billion, up from $2.7 billion in 2009. Revenue was $120.9 billion, $17 billion more than in 2009, when Volvo’s sales are excluded.

But in the fourth quarter, rising costs—driven by higher commodity prices and higher production levels—took a toll on its North American operations. There, the Dearborn, Mich., company made just $1,130 in operating profit on each of the 593,000 cars and trucks it produced in the quarter. In the third quarter of 2010, it made $2,707 per vehicle in North America.

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